Jim Hunt: So, what’s driven Bramasol to look at this? I know you’ve done a lot of work in the compliance arena. So how did the concept come about to leverage Compliance into Optimization and Transformation of the organization?
John Froelich: Yeah, sure. So, we started with Comply because we knew it was something that everybody had to do. And when we started our journey four and a half, five years ago around revenue accounting, it was all about helping companies comply. But that wasn’t simply enough, right? Everybody would look at us and say, well, all right, I did this comply thing and, and it works. But I have a lot of manual processes. I had a lot of work around what do I do next? Where do I go from here? And so we came up with this concept of Comply, Optimize, Transform. And if you think of it, customers asked us and we talked to them about, you know, first thing you need to do is create your foundation comply. And it’s that concept of creating excellence in each of these different areas. And maybe we’ll talk about that in a couple minutes, but really establishing the compliance. The next piece was, well, how do I take all of that information that I gather from complying? For example, if you were in revenue accounting, all of the new information that you have about the timing and the value, of all of these different transactions, whether it’s insights into the balance between your software, hardware, and your warranties or your uptakes or information on contract cancellations for leasing. Obviously, this is an area where the information Jim just never existed before or if it existed, it was in disparate systems or in file cabinets. Now you’ve gathered all of this information together. So what do you do with it? And that was the idea of Optimize. How do I look at all of this and make significant changes to my business so that I’m really taking advantage of this systems. And then of course, you know, with the vision of the future and it being data-driven. And I know, you know, our CEO Dave fellers loves to talk about how analytics is the face of finance transformation. I think it’s the face, but it’s also what drives the true transformation and so driving to that space. And so the reason we came up with it two-fold, one is it’s a very logical, easy way for people to think about where they are along the spectrum. Secondly is actually Comply, Optimize, Transform has a nice sound to it and it was easy for people to remember.
Jim Hunt: Excellent. A question about compliance. It sounds like, the choice that you make to comply the type of solution, whether it’s integrated, standalone, what kind of, how it fits into your technology stack. Probably, I would assume has a big impact on the rest of your journey. Whether or not you can go to optimization and effectively transform your organization down the line. So that it sounds like that initial choice is critical to the success out the other end.
John Froelich: Oh, absolutely. Jim, spot on. We believe that it’s crucial that you have an integrated system that provides you the end to end view. And when we think of comply, we think about the idea of transactional excellence, right? So you want to be able to have a complete view of everything there is to understand about your transactions, whether it has to do with revenue accounting, leasing or treasury. You want to understand that I have transactional excellence. That means that my transactions are correct, that they’re posted to the right place. That with regard to the standards that you must apply, whether it’s ASC 606 or IFRS 15 in the case of RevRec, ASC 842 and IFRS 16 with leasing, you’re complying with those standards and that those transactions represent and reflect what is really happening in your business. Whether it’s the cash accounting side or it’s the reporting side that everything flows through and that your transactions happen. So it’s crucial that you have end to end visibility. For example, in the case of leasing, do your transactions truly reflect accurately and in a timely pay the value of your leases, the value of those lease as they relate to the foreign exchange. So being able to link back to your core ERP with consistent foreign exchange. Imagine that you produce, statements at a corporate level in dollars, a regional level in Euros and a local level, for example, maybe in Swiss francs. All of those require that you have integrated foreign exchange rates. And then if you have a lot of leasing or a lot of activity, you may be looking at different bank rates. So all of that, again, realize to making sure that you have that core focus of transactional excellence.
Jim Hunt: Yeah, it sounds like a data governance might be a key factor in there too, that you need to know your data sources and unify them as much as possible in order to move on to those steps of optimization and transformation.
John Froelich: You know, Jim, you make a great point there. Of course, you know, data is what it’s all about at the basic level. And you know, we talk about, you know, we use the term data mastery, right? Because it’s not simply about the data governance in and of itself. It’s about really mastering your data. Do you have the clean data? Have you gotten all of the complete data? So not just cleanliness of the data, but the accuracy of that data, the completeness of that data, and then the appropriateness of that data is all about just setting it up. The next piece becomes, as you said, the data governance. How am I governing that data? How am I managing multiple aspects of it? Number one being ensuring that always the data is being refreshed. And that the data that comes in as being done and loaded properly. And accurately and completely, but also who has that? Then making sure that the people who have control over that, you know, are doing the right things at the right time. When, so data management, data mastery is important. And then of course you have the data management aspects of it. You have the data governance. And finally, you know, from our perspective, security, how secure is your data. You know, as you continue to look at more of these integration points, it’s important that your data is secure, particularly, you know, if you have banking information or customer credit card information, ACH information, as we continue to see the evolution of GDPR and data privacy rules, you know, the cybersecurity and the security of that data is crucial as well.
Jim Hunt: Yeah, excellent point. How do things like, machine learning and RPA play into that Optimization journey?
John Froelich: Well, Optimization is all about, uh, what we call operational process excellence, right? And so if you could start with comply, which is all about the transactions, you know, your transactions work well, but now what about the interplay of those transactions across a process? I may see that I’m creating the right leases upfront, but am I modifying those contracts properly? How does that integrate if you will, with other processes in my leasing portfolio or my asset portfolio? Right? and so, you know, as you begin to build that optimization, you’re looking at increasing the level of operational excellence and process excellence. Where does RPA relate to that? Well, first RPA, let’s define RPA, robotic process automation, and we all use that, in currently in SAP RAR BRF plus is an example of robotic process automation. It’s simply a process by which things happen automatically, right? You have a set of rules and the rules say if this happens, then that else is etc. So it’s a set of rules that happen automatically and RPA is really built into the outcome if you will of the Optimize process. You’re optimizing your use of tools that offload manual processes, right? So in comply you might have manual processes and as you move into optimize and out of optimize to transform, you’re beginning to take advantage of things like, RPAs or robotic process automations in that space. So again, you know, that’s how those relate.
Jim Hunt: And then machine learning is that where going beyond automation your systems are actually improving themselves as part of the process?
John Froelich: Correct. And of course, you know, machine learning, artificial intelligence and predictive analytics or predictive accounting all relate to that transform phase, right? Because now in comply, again, you’re making sure that your transactions are right, optimization, you’re looking across the processes and optimizing those processes. When you transform your business, you’re now using your data and your insights to drive a new level of performance, transforming quote unquote your business and machine learning and artificial intelligence and all of those tools become a crucial to that transformation phase. And of course, you know data and correct processes and this is why it’s so important that you go through through the process.
Jim Hunt: Okay. Kind of backing up in the few minutes we have left and looking at kind of the, the 30,000 foot level from a CFO or the C-suites standpoint, transformation, compliance and optimization, what you’ve walked through, people can really understand that pretty readily. Because it’s the blocking and tackling in the trenches transformation. I know a lot of CFOs and leaders of companies, they don’t, it’s hard to get their hands around transformation. I wonder if you could talk a little bit about the roadmap from Bramasol’s standpoint of things the CFO or company would need to put in place in order to prepare for transformation and then also this issue of I think sometimes it scares companies away because it feels like such a heavy left, a complete forklift change of all their systems. Is there a way to have a roadmap that incrementalizes, gets them on the track, gets them where they need to be, but it doesn’t have that complete sweep here?
John Froelich: Well, I think it’s important, Jim, as with any project. So is there a way to do it and do we talk about it and of course, absolutely. And when we talk to CFOs or we talk at different events, this is a question that comes up rather frequently. Certainly. I was at an event a couple of weeks ago, in March, where one of the largest food manufacturing companies looked at us and said, you know, we’ve started this journey, but I don’t know what I’m doing. And really the answer, it goes back to the basic blocking and tackling of anything. And I always go back to one of my favorite guys, Stephen Covey who says, begin with the end in mind. Transformation begins with sitting down and realizing what your business is all about and where you want to be. If you focus on, for example, transformation for us because of our industry is all about squeezing as much cost out of the business as possible and maximizing our ability to offer low costs options to our customers. Take a Walmart for example, they’re going to focus on transformation, really transforming their supply train chain, transforming how they do business with customers, how they maximize their use of cash because that’s where they spend a lot of money. How do I optimize the use of my retail space and then lean towards multiple interactions with different channels. Other companies that are in a different area where cash and money is crucial are going to have a different perspective on that. And companies like, the large telcos or companies that are moving into software or anything as a service need to have the flexibility to offer a variety of different plans, if you will, or options for their customers almost on the fly and begin to predict going forward. So if you think about, if that’s what I want to do, begin with that end and say, well, what do I want to do? Do I want to have a low cost model? Am I looking to create differentiation in the marketplace? Do I want to use this for that? And so beginning with the end in mind and then thinking very carefully about, you know, something we’re going to talk about in the future, the five P’s of compliance, transformation and optimization, which is this idea of policies, procedures, processes, and proof, all surrounded by the people. And how do you look at each of those in the context of what you want to accomplish. And most importantly, I think it’s because it’s all about the people, Jim, right? Everybody worries about, well, what does this mean for the people? Um, machine learning is, has a bad reputation, if you will, of being the job killer. And the reality is machine learning actually has been predicted to increase jobs over the future and artificial intelligence because it’s going to require people to stop doing transactional activity and start looking at the implications. As you know, my favorite phrase of The big, so what?, but really looking at the, so what of what this means, right? And so that’s how companies can take a step back. It’s been shown that companies who’ve started their transformative journey are seeing better customer satisfaction, increases in ROI, but clearly driven by costs, but also an increase in overall revenues because of their ability to be more agile in the marketplace. So, you know, my suggestion is number one, begin with the end in mind. Start thinking about what it is you want to accomplish. Focus on given all of that, who are the key stake holders and owners in your company and set up a focus team to execute, align those resources properly, execute. But knowing that things will always change and measure, measure, measure. Always measure your success and then when you’ve completed that, take a step back that absorb all of that learning and decide what the next path forward is. And of course across all of that is change management. I’m really wanting to know and understanding how do I absorb all of that change.
Jim Hunt: Excellent overview. So essentially you need to know where you’re going. Begin with the end in mind, and then you need to map out from where you are, what the terrain is between here and there. And then constantly measure, evaluate, re-evaluate to make sure you’re on track and to adjust for any changes
John Froelich: Right! And then the future. We can talk more about each of those steps, I think. But you know, as you think of measuring, remember that you’re, you know, there’s probably only three things in your car you actually really care about on the dashboard. Even though my wife’s new car has about a hundred things, you can look at, three of them make a difference, right? Number one is the gas gauge. If I run out of gas, I have a problem. Speed, if I’m not covering an average, you know, if I’m not going fast enough or slow enough, I’m either going to have one of two things. I don’t want to get a big ticket, which will be terrible or I won’t get to my journey in the amount of time that I have left. And of course, there’s always our favorite little check engine light, right? The check engine lights, that thing that tells you, Hey, something’s wrong. Other than that, everything else on the dashboard is interesting but not very at some point. Right.
Jim Hunt: Great overview. And, knowing a little bit about your wife’s new car agility has a lot of a very important factor too, isn’t it?
John Froelich: It is, absolutely. Agility is essential to being able to accomplish any of these tasks. You know, everybody says, well, you know, one of the push backs we had in one of our meetings was, well, what if things change? And you kind of look at them, shrug your shoulders and said, well, of course they’re going to change. Right. Understand that they will change, adjust for change and move on.
Jim Hunt: Excellent point to end on. So this has been a really good overview of Comply, Optimize, Transform and the journey that one has to take. Any final thoughts that you want to throw up?
John Froelich: Yeah, Jim and thank you for this opportunity. I want to make sure that people understand the Comply, Optimize, Transform, applies not just to compliance. So don’t think of it as Hey, I’ve complied already, I don’t need to do this again, it’s about transactional excellence, but it is a journey. And you, some steps can be shorter than others. We had a customer ask us, well, do, can I just jump to transform? Well, you can, but you need each one of these steps in order to make sure that transform happens. So remember, folks, this is all about a journey. It’s about setting the end and then having deliberate steps that take you on your journey to really being what we like to call SAP calls, the intelligent enterprise. We call it the digital enterprise, but really that vision of your company in the future. So!
Jim Hunt: Excellent. Wrap up, John. Thank you very much for your time today. And I really look forward to our upcoming session, the five P’s of compliance.
John Froelich: As do I Jim, thank you very much and everybody have a terrific day and I look forward to seeing you all soon. Thanks again.